Gov. Tom Corbett met with the Lancaster County agency interested in buying Harrisburg’s incinerator months before the burner was officially offered for sale.

Some Harrisburg officials and community leaders say they are troubled by that meeting — and its timing.

View full sizeChristine Baker, The Patriot-News/fileThe Lancaster County Solid Waste Authority discussed its plan to offer $124 million to buy Harrisburg's incinerator at a meeting held months before the burner was officially on the market. Gov. Tom Corbett attended the meeting in Philadelphia.

At that meeting with the governor on Sept. 12, 2011, the Lancaster County Solid Waste Authority discussed its plan to offer $124 million to buy Harrisburg’s burner, according to that agency’s minutes of the meeting. There also was discussion about the state’s agreement to pay $8 million to help cover improvements to the facility, the minutes stated.

Representatives of Dauphin County and Covanta Energy Co., the company that runs Lancaster’s and Harrisburg’s incinerators, were also present, according to the minutes. No one from the Harrisburg Authority, which owns the burner, attended the meeting.

So the timing of Corbett’s Philadelphia meeting is providing fresh fuel to the argument some in Harrisburg have made that the city is being denied a chance for a fair deal.

Concerns about at least a seeming lack of transparency were also raised by the conservative Commonwealth Foundation, a Harrisburg-based, free-market think tank.

The governor’s office is calling the session a courtesy meeting, and Dauphin County and Covanta officials described it as a brief meeting.

The $8 million already had been promised under the original Act 47 financial-recovery process that Harrisburg entered before the state took over and appointed a receiver, said Kelli Roberts, a spokeswoman for the governor.

“As governor, Tom Corbett regularly receives and accepts meetings where he listens to concerns or ideas that a company, business or other entity may wish to share. This meeting was a result of their request,” Roberts said.

“What they shared with the governor are simply the previously agreed-upon terms of the original recovery plan as negotiated under Act 47,” she said. “At no point has Gov. Corbett been part of the specific incinerator deal.”

Unkovic issued a request for proposals to buy the incinerator several months after he was appointed. The sale was included in the fiscal-recovery plan that Unkovic drew up for Harrisburg before he abruptly quit in March.

When he resigned, Unkovic claimed he was getting pressure from state lawmakers, Dauphin County and a local lobbyist to rubber-stamp the Act 47 plan, which recommended the sale of the incinerator to the Lancaster Authority.

Five companies showed interest, and three submitted formal bids for the incinerator. The Harrisburg receiver’s office said at the end of June that Lancaster offered the best bid and that negotiations are continuing with it alone.

“[Harrisburg Receiver William Lynch] reached his decision after a formal process,” said Cory Angell, Lynch’s spokesman. “Based upon the recommendation of the screening and evaluation team, he decided to open detailed negotiations at that time with one of the qualified proposers, that turned out to be [the Lancaster Authority].

“It is also worth noting that the final determination was shared with the Harrisburg Authority, who was in concurrence with our determination,” Angell said. “[Lancaster] had the better offer to enter into final negotiations.” 

Concerns arise

The fact that the Lancaster Authority was anticipating receiving state funding and appears in the meeting minutes to be negotiating the deal before it was time to bid, is concerning, said Nate Benefield, director of policy analysis for the Commonwealth Foundation.

“That puts state taxpayers on the hook. It looks like they are asking for a subsidy to get the deal done. They didn’t offer that to everyone else,” Benefield said. “It makes me wonder why the state should be subsidizing any of this at all, rather than just letting the competitive bid process get the fair market value for the incinerator.

“The most important part in doing these deals is that taxpayers can see what is going on,” Benefield said.

Harrisburg City Council President Wanda Williams said she is bothered by the meeting.

“It raises red flags about deals being made in private without the involvement of the Harrisburg Authority, council and other officials who should have been at the table,” Williams said. “It speaks to who is being truthful about the fiscal-recovery process.”

Neither Harrisburg Authority Chairman J. Marc Kurowski nor the spokesman for the Dauphin County commissioners could be reached for comment.

Mayor Linda Thompson’s spokesman, Robert Philbin, refused to comment for this story.

Covanta scheduled the Philadelphia meeting, which also included James Warner, CEO of the Lancaster Solid Waste Authority, and Dauphin County attorney Chuck Zwally.

Warner and Zwally recalled that the meeting with Corbett was brief, saying it lasted five to 10 minutes.

The proposal was the same offer the Lancaster Authority already made to the Harrisburg Authority through the Act 47 plan, which Harrisburg’s City Council rejected the month before the private meeting with Corbett, Warner said.

Warner said Covanta arranged for a brief meeting with the governor and asked that he and representatives of Dauphin County attend, because the two entities had been discussing the incinerator. Dauphin County guaranteed roughly half of the city’s $340 million of debt racked up during the burner’s problematic retrofit.

“We didn’t really go in asking for anything,” Warner said.

“We didn’t know which direction to go. We tried through the Act 47 process, that failed, and then it was just like we had to sit back and wait until the receiver was appointed. There was no conspiracy or inside track with the governor.” 

Minutes of the meeting

Sections of the meeting minutes read as follows: 

Î¤ “The meeting went extremely well. The message for the governor was that there is a unified team between [the Lancaster Authority], Covanta and the County of Dauphin ready to come in and execute the transaction. The work has been done, short of signing any documents, for the major conditions that would allow [the Lancaster Authority] to own the asset.” 

Î¤ “The state has been preparing for months to somehow take over the financial responsibilities of the city and implement [the Act 47] plan for them. A bill recently passed the House that is being reworked and may pass a constitutional challenge. It is safe to say there is likely to be a bill active in the House and Senate within two weeks, upon their return to session.” 

Î¤ “Part of the business model allowing the price to purchase the [incinerator] to be increased to $124 million included getting money for the capital improvements from elsewhere and not use the cash flow from the facility. Half of the $16 million that would be needed would come from the state and this has been authorized.” 

Î¤ “The other critical component that the state can provide is cooperation from the Department of General Services to work with [the Lancaster Authority] in setting up the commonwealth to be the long-term purchaser of the electrical output of the plant. This way, [the Lancaster Authority] will have a contract with fixed prices with escalators to take into our financing so there is a buyer and all that is needed will be the megawatts to come up with the amount of revenue that is guaranteed. This looks very favorable because the governor’s office has been requesting that DGS cooperate.” 

‘It’s disconcerting’

Harrisburg councilman Brad Koplinski said that in light of the meeting’s minutes, Lynch should make all of the incinerator bids public to ensure that a fair incinerator bid process plays out.

Alan Kennedy-Shaffer, founder of grassroots community group Harrisburg Hope, said the meeting’s minutes are telling.

“It’s disconcerting to hear that the state takeover and sale of assets to specific bidders might have been in the works long before the citizens of Harrisburg were informed,” Kennedy-Shaffer said.

Bishop A.E. Sullivan, president of Harrisburg’s Interdenominational Ministers Conference, said he questions why neither the Harrisburg Authority, Thompson nor the council was invited to the Philadelphia meeting.

“My suggestion is that the U.S. attorney general and/or the SEC comes to the capital city, come in and take down this whole house of cards,” Sullivan said. “This behavior has gone on for too long. This has not been a fair process.”

Mark Schwartz, the attorney who filed an unsuccessful bankruptcy petition for the council last year, said the meeting helps prove the state’s fiscal-recovery plan for Harrisburg is “a farce.”

“I could never understand the pressure on City Council to accept the state-appointed consultant’s report with the numbers the way there were,” Schwartz said. “Unkovic was trying to get competition, openness and transparency when the governor was trying to subsidize one potential bidder’s deal.”

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